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The Serious Problem of Excluding Private Care in Canada’s Child-Care System

This article originally appeared in The Hub on December 20, 2023.

When the Senate considered Bill C-35, An Act respecting Early Learning and Child Care in Canada, they heard from close to 60 witnesses. The resulting Senate committee report was a mere six paragraphs. Its last sentence points to what is an ongoing thorn in the side of achieving a child-care system of any kind, let alone one that is accessible, affordable, and high quality.

“Your committee recommends that the agreements with provinces and territories…focus on providing funding to create a high quality public early learning and child care system,” wrote Committee Chair Ratna Omidvar (emphasis mine).

In other words, the report questions the continued inclusion of private child care.

Statistics Canada says of the families using non-parental care, only about a third use the type of child care the federal-provincial $10-a-day agreements fund. Consider also the many families providing care for their own kids, foregoing additional wages whilst Canadians earning $180,000 annually gain access to subsidies for licensed daycare spaces.

Frankly, Canada’s national daycare system excludes many more Canadians than it includes. Statistics Canada data tells us that whether a child care is public, not-for-profit, or private does not register when parents make child-care choices. Parents simply expect lowered fees.

Yet hostility to all forms of private care is embedded in every child-care agreement across Canada. Alberta’s agreement is more punitive than British Columbia’s, which is surprising, given the Alberta-federal agreement in 2021 was heralded as achieving a victory for private child care.

Of course, Alberta’s agreement pays lip service to private care. However, the same agreement removes the freedom for private care to flourish. There’s the “cost-control framework” and a government-mandated “For-Profit Expansion Plan.” Neither concept meshes with entrepreneurs’ realities. In a November 29, 2023, Ministry of Child and Family Services town hall for child-care operators, Assistant Deputy Minister in Children and Family Services Joni Brodziak clarified that up to 85 percent of spaces must be in “facility-based care,” not family day homes. That’s a high level of state intervention.

While all child-care providers face hurdles in transitioning to the new system, government mismanagement creates an acute problem for smaller private providers. Krystal Churcher operates a preschool in Fort McMurray and a child-care centre in Calgary. She also started the Association of Alberta Childcare Entrepreneurs, an advocacy group representing owner-operators. “Smaller centres,” Churcher told the Senate in October 2023, “lack the financial reserves or cash flow to sustain the demands placed upon them by the agreement. Unlike larger centres, they struggle to serve as unpaid financial agents as required under the current terms.”

The usual rationale for prioritizing not-for-profit care is its supposed superior quality. However, given government’s assault on the ability to own or expand a private centre, for-profits are now becoming not-for-profit. So, the same owners offer the same service under a different model. One provider who preferred anonymity said, “They lease back their furniture. They contract out their kitchens. They contract out their transportation… Some of them contract out their ECE staff.”

Christine Pasmore runs Wee Care, a private centre in Grand Prairie. Any further expansion she undertakes will be not-for-profit. “I hold reservations about the government providing adequate funding to ensure the delivery of quality childcare services,” she explains. “Opting for a not-for-profit model offers us the flexibility to engage in fundraising, such as raffles and casinos, which can bridge financial gaps and support our commitment to quality childcare.” Bridging shortfalls is quite a far cry from “profiting” off “public resources,” the oft-cited concern in committee testimony on Parliament Hill.

No matter the type of child care she starts, Pasmore points to government ineptitude. “It’s been a difficult process to get the grants. There’s a lot of back and forth where the government does not even understand its own process. A real lack of understanding that things cost money. And that there are real people behind this.”

When for-profit centres simply become not-for-profits, it undermines the reigning orthodoxy in child-care research, which is that not-for-profit child care is of higher quality. But that doesn’t stand up to greater scrutiny.

Firstly, quality discussions, especially on Parliament Hill, are riddled with conflicts of interest. The overwhelming majority of committee witnesses were publicly funded, either being part of government or a government-funded association—both of which stand to benefit financially from a system that favours public/not-for-profit care. Likewise, labour unions, which would also gain members from unionized staff in a public child-care system, played an outsized role in Parliamentary testimony.

The quality discussion is also incomplete. In his Parliamentary Committee brief, economist and public system advocate Gordon Cleveland included a chart that shows Quebec’s government considers for-profit care centres to have “inadequate” quality more often than public centres. However, the chart doesn’t tell us why this is so. Is it the for-profit status, or is it that these providers don’t receive the benefit of the provincial subsidy?

Indeed, a 2005 report showed “evidence claiming to show a quality difference between for-profit and non-profit in Canada tends to ignore the fact that many provinces discriminate against for-profit child care by denying them grants and subsidies available to non-profit centres. When these factors are taken into account, there is no statistical difference in quality between the two sectors nationwide.”

The biggest quality difference is not based on the profit motive, but rather is between family and non-family care. A major 2007 National Institute of Child Health and Human Development study in the United States assessed all non-maternal care. It found all centres have the lowest quality of care. “The highest level of positive caregiving was provided by in-home caregivers, including fathers and grandparents, caring for only one child, closely followed by home-based arrangements with relatively few children per adult. The least positive caregiving was found in centre-based care with higher ratios of children to adults,” the study says.

Despite a $30 billion federal commitment, Canada has not had a robust child care quality discussion. A 2022 Canadian government review confesses: “Unfortunately, [child care] quality has received minimal attention in the Canadian landscape.”

Canada’s real conundrum is that the desire for accessibility, affordability, and high-quality care is simply impossible. Independent researcher and political columnist Rahim Mohammed says we can’t have all three. “Quebec managed to reconcile low fees with accessibility (all things considered) but sacrificed quality. B.C., so far, has been more deliberate/selective in rolling out its child care program but hasn’t created spaces at a fast-enough pace for the public’s liking.” (British Columbia public daycare advocacy group $ recently advertised that “only 3 percent of families have access to a $10-a-day childcare program.”)

Public system advocates are in a bind. They can have majority public care accessible only to a slim minority. Or they can have a broadly accessible system that they believe is lower quality. Provinces are also in a bind, having signed restrictive agreements. But there is hope. The agreements the provinces signed include a clause about renegotiation in 2026, noting it is “the opportunity to review and course correct, if required.”

For so many families, parents, and caregivers of all kinds, that course correction cannot come soon enough.

Andrea Mrozek is a Cardus senior fellow

December 20, 2023

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Canada’s national daycare system excludes many more Canadians than it includes, writes Cardus Senior Fellow Andrea Mrozek.